ACCC reports upon Telstra’s compliance with its structural separation undertaking

13 May 2015

The Australian Competition and Consumer Commission’s annual report on Telstra’s compliance with its Structural Separation Undertaking (SSU) was tabled in Parliament yesterday.

The report demonstrates that Telstra was generally compliant with its commitments under the SSU during the 2013-14 financial year, but nonetheless failed to meet its obligations on a number of occasions.

“The SSU is working to address the long standing competition concerns stemming from Telstra’s vertical integration by promoting a high level of compliance with Telstra’s equivalence obligations and remedying any shortcomings as they are brought to light,” ACCC Commissioner Cristina Cifuentes said.

In the 2013-14 financial year, Telstra breached its SSU obligations to:

  • ensure equivalence between its retail and wholesale operations in the rectification of basic telephone service (BTS) faults and the ADSL/LSS service qualification process
  • properly ring-fence confidential or commercially sensitive wholesale customer information, provided to Telstra in its capacity as access provider of regulated services, from being disclosed to its Retail Business Units.

The relevant SSU obligations are in place to safeguard competition until the roll-out of the National Broadband Network (NBN) is complete and Telstra fixed-line customers have been migrated.

Telstra has made significant progress towards addressing issues that came to light following the commencement of the SSU. In this regard, Telstra has recently advised that it has now completed a project to remediate its systems and processes to better safeguard against the disclosure of protected wholesale customer information.

The report also outlines instances where Telstra breached newly commenced Migration Plan obligations. The Migration Plan sets out how Telstra will disconnect customers from its copper and HFC networks and commence supplying services using the NBN. These breaches were largely a result of Telstra adopting alternative interim arrangements, with the ACCC’s consent, to ensure a more positive experience for end-users migrating to the NBN.

The ACCC’s response to the SSU breaches has been to work with Telstra to focus upon stopping the conduct, reducing its effect, and ensuring steps are taken to prevent recurrence. The ACCC has also encouraged Telstra to keep its wholesale customers informed of SSU equivalence and migration issues as they arise.

See also: Telstra's Structural Separation Undertaking 2013-14

Release number: 
MR 82/15
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